Economics MCQs

Page No. 272

If PX > MCX, society gains by ?


a raising the price of X.


b production less X


cProducing more X


d Increasing the cost of producing X


View Answer Producing more X

A way of helping depressed regions by having lower wages, lower local taxes and lower unemployment benefit has been suggested as ?


amarket orientated economists


bleft-wing theorists


c Keynesian


dNew-Keynesian



The PFI aims to deliver public projects and services using ?


a Public borrowing


bThe private sector


ctime and motion studies


d foreign labour


View Answer The private sector

New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning uses was that this would ?


areduce poverty


b reduce unemployment


cweaken the power of trade unions


dhelp small businesses



According to the Laffer curve as tax rates increase tax revenue ?


ainitially increase and then decrease


bdecrease continuously


crise continuously


dinitially decrease and then increase



According to supply-side economists if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?


a aggregate supply will increase , aggregate demand will decrease


baggregate supply will increase, aggregate output will increase and the price level will decrease


caggregate supply will increase aggregate output will increase and the price level will increase


d both aggregate supply and demand will increase and the price level will increase



A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work save and invest these economists are ?


asupply side economists


bneo-Keynesian economists


c rational -expectations economists


dNew classical economists



The accelerator theory of investment says that induced investment is determined by ?


athe level of national income


b the level of aggregate demand


c the rate of change of national income


d expectations



According to the paradox of thrift increased efforts to save will cause ?


aan increase in income and an increase in overall saving


b a decrease in income and an overall decrease in saving


ca decrease in income but an increase in saving


dan increase in income but no overall change in saving



Assuming there is no government or foreign sector the formula for the multiplier is ?


a1/MPS


b1/(1+ MPC)


c 1 – MPC


d 1/MPC


View Answer 1/MPS

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